20 March 2014 by David Smith, FIA, FIRESA Secretary

Reports are something that we become aware of at a relatively early age through the chalk-dusted medium of the school report and what is worse, while it is not a matter of public record, it is written specifically about you and is intended to be scrutinised by your parents. I seem to recall that mine were, at best, smattered with faint praise…’Smith has made a significant contribution to the school over the past year, regrettably none of it remotely positive’. On Biology: ‘He has an adequate grasp of unicellular organisms but his most notable achievement was surely to avoid arrest on the recent field trip to Camber Sands’. Chemistry proved eventually to be my thing but even with that ‘Smith has shown some encouraging signs but further progress is in doubt following the loss of the science block to the incident involving 15 car batteries wired in series, several sacks of ammonium nitrate and an old water tank filled with a lethal combination of hydrogen peroxide and industrial duty bleach’. I used to imagine the world and everything in it made of balloons so that I could do around deflating the school and the teachers before turning the pin on myself just to hear the immortal phrase ‘you’ve let the school down, you’ve let your teachers down and you’ve let yourself down’.

As we progress through life, we soon realise that reports usually serve a valuable purpose that is somewhat greater than catalysing a heated family debate and resulting in being grounded for a fortnight. There is a general rule that applies, however, and it is summed up well by Winston Churchill when he said ‘the length of this document defends it well against the risk of its being read’. There must indeed be an inverse relationship between the page count of a report and whether anyone will even start to read it and, if so, how far they will get before reverting to that saviour of the weighty tome, the Executive Summary.
There have been several reports issued in the last year or so that have been of interest to the FIA Export Council and the first that I shall refer to goes back to April 2013 when the CBI published ‘The Only Way Is Exports’ which asserts boldly, if correctly, that UK exports have dramatically underperformed and have been instrumental in contributing to a trade deficit over each of the last 15 years. With UK exports almost halving as a percentage of the world market since 1980, it recommends, not surprisingly, renewed focus especially on high growth markets that includes the BRIC and MINT nations where other countries already have a far more impressive foothold.
The CBI’s other recommendations range from the eminently sensible to the more bizarre. Certainly, it’s quite right to place emphasis on several central government and UKTI initiatives that seek to place exports at the heart of our industrial strategy and put in place a viable tactical framework that assists both seasoned and fledgling exporters to achieve more in the global market. They also single out the need, as they put it, to ‘strengthen domestic supply chains’ which in normal parlance means that we should be making more of our own components and products rather than buying them in and selling them on. It starts to dip its toe in more contentious waters in my view when it calls for a lifting of restrictions on night flights and raises concerns on adherence to the Bribery Act, albeit that there are business implications when the straight bat of UK companies receives a curved ball in certain countries where corruption remains a way of life.
In October last year, the National Audit Office published its report ‘Supporting UK Exporters Overseas’ which examined the work of both the FCO and UKTI and, in particular, whether they are doing enough to realise government’s aim to double exports to £1 trillion by 2020. I’ve spoken of this target before [somewhat sceptically as you might imagine] and the NAO seems to agree, noting that exports have been flat over the last two years and that they must increase by 10% year-on-year to meet the clearly unachievable target. The ‘clearly unachievable’ is my bit but I suspect the NAO would agree as would any multicellular organism with any semblance of a nervous system.
Regaining ground will be a tough call because emerging markets are themselves increasingly bringing their own products to the world market, often with a lower cost base than their UK equivalents, and the erosion of our manufacturing capability leaves us in an intrinsically weak position to capitalise on the industrial goods demand of the less well-developed world. In 2011, the UK was second only to the USA in its export of services but tenth in terms of goods. There is also the thorny matter of the BRICs and other supposedly high priory export markets seeing their growth slowing and falling way below earlier estimates, contributing to a 17% fall in our non-EU exports.
The NAO report accuses the UKTI and FCO as having poorly-defined and misaligned roles in growing exports and lacking measureable targets. The report does feature some useful information on what these organisations do and how they might be more effective but it rather does what it says on the tin and attempts to audit internally rather than looking to the interaction of these bodies with the outside world. Given the paucity of KPIs as we might put it, the NAO report is left as more of a qualitative assessment than a quantitative one.
In January this year and undoubtedly in response to the NAO report, we saw the issue of ‘Open For Business; The Next Phase’ which reviews UKTI’s progress made against its Five Year Strategy launched in mid-2011 but which also initiates renewed focus in certain areas. In essence, government pledged to target export growth in small and medium sized businesses, provide focus on High Value Opportunities and build top-level strategic relationships, while the new document goes further in indicating enhanced support for SMEs, a widening of the definition of high growth markets, greater investment in ‘eight great technologies’ industry sectors and improving export finance.
My primary concern in all of this is how all the positivity radiating from UKTI and greater financial support for the UK’s export drive translates into tangible assistance for companies based in the UK, notably our wide range of SMEs. It would be wrong and certainly biased [see later] not to recognise a number of UKTI initiatives aimed at supporting SMEs, these including TAP funding and the Open To Export and Passport To Export schemes as well as a vast array of events across the UK. These are, however, aimed at individual companies rather than industry sectors collectively and their respective trade associations. A common thread in the export support discourse is to suggest that trade associations should do more to support their members in this respect but this requires government and its agencies to assist us more effectively. It is at this stratum where I believe that UKTI has started to lose direction and there are several examples that I have encountered where our links and material support from UKTI centrally have been cast adrift.

A further part of the problem I feel is that policy to boost UK exports places too much emphasis upon already huge multinationals selling into a few defined priority markets. It is often cited that our defence industry gains a 20% share of the global market as justification for continuing to support that sector, disproportionally as it turns out. Ann Feltham, a Liberal Democrat supporter, rounds on Vince Cable with figures that show that over 50% of UKTI’s industry-specific staff resource in 2010 was in defence when by her reckoning it accounts for only 1.5% of our total exports and 0.2% of our national labour force.

We would add to this a cultural difficulty in that UKTI centrally has always been and continues to be almost exclusively a government-to-government organisation in its ethos and hence its global activities, something that they readily admitted in a recent meeting I had with them. Again, defence is the main beneficiary of this while the great majority of business-to-business sectors fail to attract an adequate level of co-ordinated activity.

What we are experiencing, therefore, is a greater concentration of effort in a limited number of pre-determined sectors and markets, with SMEs in most sectors finding their own way through the range of often-chargeable services on offer. The FIA Export Council is not alone in having to reposition itself and look beyond UKTI in order to deliver its objectives but also to re-establish itself within the UKTI hierarchy.

Whatever report crosses our desks on its way to the recycling bin, we all must remain aware that there are few, if any, that are wittingly or unwittingly devoid of some element of bias. The dossier on the Iraq WMD threat clearly featured blatantly incorrect information and debate still simmers on whether the original evidence was ‘sexed up’, the Labour government at the time and Lord Hutton saying it wasn’t and pretty well everyone else thinking it was. The same jaundiced eye should be applied to all forms of communication in an age where so much can be transmitted and received and where there is not just more misinformation out there in absolute terms but also proportionally. It is just much easier in many ways to deploy abject nonsense into the media and, with the press going along for the ride, implant perceived wisdom across all four corners of the globe that has no basis in fact. In so many cases in the political arena alone, controlling the agenda comprises getting your version of the truth out first via friendly media and then repeating it at every available opportunity. It’s surprising how well this works and if challenged by inconvenient facts, you simply need the chutzpah to deny them. When Iain Duncan-Smith was questioned by John Humphrys about homelessness in the UK, he claimed the figures had ‘hardly moved’; official data shows it has increased by 27% under the current administration. In the same interview, Duncan-Smith claimed that the benefits cap had been responsible for getting 8,000 into work and when informed that the UK Statistics Authority had said this figure was unsupported, he simply replied 'I believe this [my figures] to be true’. So that’s alright then.

The export-related reports we have referred to here can all be judged in relation to their sources and hence their ultimate purpose and inherent bias. The CBI casts a realistic eye on the challenge ahead, identifying problems and, in some cases, suggesting solutions but even then, their preferred solutions hint at the claim made in the documentary film ‘The Corporation’ that big businesses are basically sociopathic. The NAO is funded by parliament and so while their view on UKTI and the FCO is critical, it offers a rosy view on improvements already happening and so their report treads a typically neutral path of which they are often accused. The ‘Britain Open For Business’ document is a publication which, like most government pronouncements on UK exporting, is carefully positioned to reflect what it is hoped will be achieved rather than what is actually possible. This is the Ministry of Truth writ large in a world where 2+2=5 and in the Radiohead song of that name, ‘it’s the devil’s way now, there is no way out’ just may be true.

Anyone wishing to read an excellent critique of how the global media is subject to falsehoods, distortion and propaganda is referred to Nick Davies’ book entitled ‘Flat Earth News’. Actually, I’m currently in the throes myself of writing a mystery novel…or am I?